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In New York State, education corporations are created by the Board of Regents of
The University of the State of New York. As the senior educational authority in New
York State, the Board of Regents oversees the State's educational system. Nonprofit
organizations and institutions with educational purposes, such as schools and cultural
agencies, seeking to incorporate, must do so under Education Law § 216, subject to
the authority of the Regents. New York State is unique in the United States because it not
only considers its cultural agencies to be an integral part of its educational system, it
incorporates such agencies under Education Law instead of under Corporation Law.

While every other state views cultural agencies as nonprofit businesses, New York treats
them as educational organizations. This is a significant difference because the underlying
assumption of Education Law, as implemented by the Rules of the Regents, is that the
Board of Regents will evaluate the quality of an organization or institution that seeks to
be incorporated. This is the same judgment applied by the Board of Regents when it
considers the chartering of schools and institutions of higher learning. In fact, the charter
is the instrument used to incorporate schools and colleges, as well as most cultural
agencies. Because of the judgment implied in its granting, considerable prestige is
associated with a Regents Charter.

Charter

A museum or historical society that wishes to organize as a nonprofit education
corporation must do so by petitioning the Board of Regents for the issuance of a charter.
A charter is granted by the Board of Regents as an instrument of incorporation to
museums and historical societies that satisfy Regents standards of organizational and
educational quality. These standards are consistent with professionally accepted
principles and practices as adopted by the American Alliance of Museums and the
American Association for State and Local History. To achieve them usually takes a
period of development. For that reason chartering is a two-step process, from provisional
to absolute.

Provisional Charter

A provisional charter is a form of incorporation granted for a probationary period of
three to five years to museums and historical societies that have reasonable prospects of
meeting Regents standards.

The purpose of the provisional charter is to incorporate new museums and historical
societies for a period of five years and to encourage them to develop, using
Regents standards as a guideline. At the end of the period covered by the provisional
charter, the museum or historical society may petition either to have its charter extended
for an additional term or to have it made absolute.

Absolute Charter

An absolute charter is granted to museums and historical societies that meet the
organizational and educational standards established by the Regents and thereby achieve
what is termed registration. The progress made by a museum or historical society during
the term of its provisional charter is measured by applying the criteria set forth as
standards in the Rules of the Regents. If an organization has a record of financial
stability, programmatic accomplishment, and a well-founded reputation for excellence, it
is usually successful in meeting the requirements of registration. The result of a
successful review forms the basis of the recommendation that the Regents grant an
absolute charter. If the Regents concur in that recommendation, the museum or historical
society is registered and an absolute charter is granted.

Organizations that do not receive approval for an absolute charter may have their
provisional charters extended for an additional term. The renewal of the provisional
charter continues the museum or historical society's status as an education corporation,
and provides time for the organization to develop and meet Regents standards. A museum
or historical society that continues to demonstrate progress toward achieving Regents
standards is eligible for additional extensions of its provisional charter.

Annual Report

Museums and historical societies chartered by the Board of Regents are required to
submit annual reports in a form prescribed by the Regents. These reports provide up-to-
date information to the Regents on the activities of each agency, including organizational
and programmatic accomplishments.

With the exception of libraries, if a cultural agency does not qualify as a museum or
historical society, it is not eligible for a charter. If the organization is nonprofit as well as
educational and wishes to incorporate, it may petition for the issuance of a Regents certificate of
incorporation. This instrument constitutes official recognition that the organization's
purposes are of educational or cultural value. It is a permanent form of incorporation.

If
the organization has educational purposes which are incidental to its primary mission, it
may incorporate under the not-for-profit corporation law, with the prior consent of the
Commissioner of Education, by filing a certificate of incorporation with the Department
of State. For more information about Commisioner's Consent please visit the consent section of the Office of Counsel's website.

Although the process of incorporating cultural agencies in New York State is a
regulatory function, the posture of the Board of Regents and the staff of the State
Education Department and the State Museum is developmental. Fostering the evolution
of excellent cultural agencies in New York State is the primary objective of the policies
governing incorporation. New York's wide range of excellent cultural agencies is
recognized by the Board of Regents as one of our State's most important educational
resources.